Automotive News China/Reuters, 15th November, 2010
(Reuters) – Shanghai Automotive Industry Corp. has reached an agreement in principle to take a stake in General Motors Co. if Chinese regulators approve the deal, a person familiar with the matter said. China’s Government would have to approve the investment before Wednesday for SAIC to participate in GM’s initial public offering of shares, the person said.
The amount of the proposed investment by China’s top automaker was not immediately clear on Sunday. Negotiations between the two sides have focused on an investment of $1 billion or less in a move that would help cement agreements for increased cooperation between the automakers outside China.
The Wall Street Journal, citing sources close to the talks, said SAIC was looking at a 1 percent stake in GM valued at $500 million. The newspaper said several sovereign wealth funds in the Middle East and Asia also are expected to invest in the automaker’s initial public offering, giving foreign investors an estimated 4 percent stake in GM.
The automaker is expected to price its IPO on Wednesday and begin trading shares on Thursday. The US Government is expected to reduce its stake in the automaker from 61 percent to 25 percent after the initial public offering.
GM and SAIC representatives could not be reached immediately for comment. The person familiar with the matter was not authorized to speak publicly as the discussions between GM and SAIC remain private.
[Source: Automotive News China/Reuters]
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